Banarasi Holding Pvt. Ltd., Kolkata V. ITO, Ward-13(1), Kolkata, Kolkata

ITA 1574/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1642 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2010-2011
• Appeal Filed On: 03-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTACHARJEE
• Assessee Lawyers: MANISH TIWARI
• Section: 143(3)

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBER ITA NO.1574/KOL/2016 ASSESSMENT YEAR:2010-11 BANARASI HOLDING PVT. LTD., P-3, NEW CIT ROAD KOLKATA-73 [ PAN NO. AABCB 4048 H ] / V/S . ITO WARD-3(3), AAYKAR BHAWN POORVA,10, SHANTI PALLY, KOLKTAT-107 /APPELLANT .. /RESPONDENT /BY APPELLANT SHRI MANISH TIWARI, FCA /BY RESPONDENT SHRI ARINDAM BHATTACHARJEE, ADDL. CIT-DR /DATE OF HEARING 01-01-2018 /DATE OF PRONOUNCEMENT 02-02-2018 /O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, KOLKATA DATED 06.09.2016. A SSESSMENT WAS FRAMED BY ITO WARD-3(3), KOLKATA U/S 143(3) OF THE INCOME TAX ACT , 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 28.03.2013 FOR ASSE SSMENT YEAR 2010-11. 2. IN THIS APPEAL THE ASSESSEE HAS CHALLENGED THE ORDER OF CIT(A) WHEREBY THE CIT(A) CONFIRMED THE ORDER OF AO IMPOSING PENALTY O N THE ASSESSEE U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (ACT). ITA NO.1574/KOL/2016 A.Y. 2010-11 BANARASI HOLDING PVT. LTD. VS. ITO WD-3(3) KOL . PAGE 2 3. THE FACTS AND CIRCUMSTANCES UNDER WHICH PENALTY U/S 271(1)(C) OF THE ACT WAS IMPOSED ON THE ASSESSEE BY THE AO ARE AS FOLLOWS :- THE ASSESSEE IS A PRIVATE LIMITED COMPANY AND DERIV ING INCOME FROM THE BUSINESS OF PUBLISHING & BOOK SELLING. DURING ASSES SMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT VARIOUS ADDITIONS AMOUNTI NG TO RS. 18,03,542.00 WERE MADE TO THE TOTAL INCOME OF THE ASSESSEE. IN R ESPECT OF THE AFORESAID ADDITION MADE IN THE COURSE OF ASSESSMENT PROCEEDIN GS, THE AO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT. THE I NITIATION OF PENALTY PROCEEDINGS WAS MADE BY THE AO BY OBSERVING AS FOLL OWS: PENALTY PROCEEDINGS U/S.271(1)( C) IS INITIATED SE PARATELY 4. IN THE PENALTY PROCEEDINGS THE ASSESSEE FAILED TO APPEAR TO RAISE ITS POINTS OF CONTENTIONS. THUS PENALTY U/S 271(1)(C) OF THE ACT FOR RS. 5,41,063.00 BEING 100% OF THE AMOUNT OF TAX SOUGHT TO BE EVADED WAS IMPOSED O N THE ASSESSEE BY THE AO. THE ORDER OF AO WAS CONFIRMED BY CIT(A). 5. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE HA S FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 6. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEF ORE US THAT THE SHOW CAUSE NOTICE ISSUED U/S 274 OF THE ACT BEFORE IMPOSING PENALTY D OES NOT CONTAIN THE SPECIFIC CHARGE AGAINST THE ASSESSEE NAMELY AS TO WHETHER THE ASSES SEE WAS GUILTY OF HAVING CONCEALED PARTICULARS OF INCOME OR HAVING FURNISHED INACCURAT E PARTICULARS OF INCOME. A COPY OF THE SHOW CAUSE NOTICE U/S 274 OF THE ACT WAS FILED BEFORE US AND PERUSAL OF THE SAME REVEALS THAT AO HAS NOT STRUCK OUT THE IRRELEVANT P ORTION IN THE SHOW CAUSE NOTICE AND THEREFORE THE SHOW CAUSE NOTICE DOES NOT SPECIFY TH E CHARGE AGAINST THE ASSESSEE AS TO WHETHER THE CHARGE IS OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE SAME IS REPR ODUCED FOR THE PURPOSE OF READY REFERENCE: HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. ITA NO.1574/KOL/2016 A.Y. 2010-11 BANARASI HOLDING PVT. LTD. VS. ITO WD-3(3) KOL . PAGE 3 7. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTE NTION TO THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS IN ITA NO.380 OF 2015 DATED 23.11.2015 WHEREIN THE HONBLE KARNATAKA HIG H COURT FOLLOWING ITS OWN DECISION IN THE CASE OF CIT VS MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565 TOOK A VIEW THAT IMPOSING OF PE NALTY U/S 271(1)(C) OF THE ACT IS BAD IN LAW AND INVALID FOR THE REASON THAT T HE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSE E AS TO WHETHER IT IS FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE LD. COUNSEL FURTHER BROUGHT TO OUR NOTI CE THAT AS AGAINST THE DECISION OF THE HONBLE KARNATAKA HIGH COURT THE REVENUE PREFER RED AN APPEAL IN SLP IN CC NO.11485 OF 2016 AND THE HONBLE SUPREME COURT BY ITS ORDER DATED 05.08.2016 DISMISSED THE SLP PREFERRED BY THE DEPARTMENT. THE LD. COUNSEL ALSO BROUGHT TO OUR NOTICE THE DECISION OF THE HONBLE BOMBAY HIGH COUR T IN THE CASE OF CIT VS SHRI SAMSON PERINCHERY IN ITA NO.1154 OF 2014 DATED 05.01.2017 WHEREIN THE HONBLE BOMBAY HIGH COURT FOLLOWING THE DECISION OF THE HON BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) CAME TO THE CONCLUSION THAT IMPOSITION OF PENALTY ON DEFECTIVE SHOW CAUSE NOTICE WITHOUT SPECIFYING THE CHARGE AGAINST THE ASSESSEE CANNOT B E SUSTAINED. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF ITAT IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS ACIT IN ITA NO.1303/KOL/2010 DATED 06.11.2015 WHEREIN IDENTICAL PROPOSITION HAS BEEN FOLLOWED BY THE TRIBUNAL. 8. THE LEARNED DR SUBMITTED THAT THE ASSESSEE FAI LED TO APPEAR BEFORE THE LD. CIT(A) AT THE TIME OF HEARING, THEREFORE THE MATTER SHOULD BE RESTORED BACK TO THE LD. CIT(A) FOR FRESH ADJUDICATION. 9. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE FACTS OF THE CAS E HAVE ALREADY BEEN ELABORATED IN THE PRECEDING PARAGRAPHS THEREFORE WE ARE NOT REPEA TING THE SAME FOR THE SAKE OF BREVITY. FROM THE FOREGOING DISCUSSION WE FIND THA T THE IMPUGNED PENALTY ISSUE HAS BEEN SETTLED BY VARIOUS COURTS. THEREFORE WE ARE NO T INCLINED TO RESTORE THE ISSUE TO THE ITA NO.1574/KOL/2016 A.Y. 2010-11 BANARASI HOLDING PVT. LTD. VS. ITO WD-3(3) KOL . PAGE 4 FILE OF LD. CIT(A). WE HAVE ALREADY OBSERVED THAT T HE SHOW CAUSE NOTICE ISSUED IN THE PRESENT CASE U/S 274 OF THE ACT DOES NOT SPECIFY TH E CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT STRIKE OUT THE INAPPROPRIATE WORDS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSITION OF PENALTY CANNOT BE SUSTAINED. THE PLEA OF THE LD. CO UNSEL FOR THE ASSESSEE WHICH IS BASED ON THE DECISIONS REFERRED TO IN THE EARLIER P ART OF THIS ORDER HAS TO BE ACCEPTED. WE, THEREFORE HOLD THAT IMPOSITION OF PENALTY IN TH E PRESENT CASE CANNOT BE SUSTAINED AND THE SAME IS DIRECTED TO BE DELETED. THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 9. IN THE RESULT, ASSESSEES APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 02/02/2018 SD/- SD/- ( % ') ( ') (S.S.VISWANETHRA RAVI) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER *DKP, SR.P.S ) - 02/02/2018 / KOLKATA / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-BANARASI HOLDING PVT. LTD. P-3, NEW CIT ROAD, KOKATA-73 2. /RESPONDENT-ITO WARD-3(3), KOLKATA 3. , - / CONCERNED CIT 4. - - / CIT (A) 5. . %%, , , / DR, ITAT, KOLKATA 6. 2 / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY HEAD OF OFFICE/DDO ,,